FINC 425 DAY 1 READING HOMEWORK QUESTIONS

True or false: An investment is the current commitment of money or other resources in the expectation of reaping future benefits. - Answer- True Financial assets do not directly contribute to the ____________ capacity of the economy. - Answer- Productive Debt securities are ______________ to the issuers of those securities. - Answer- liabilities A floating-rate bonds promise payments that debt are: A. based on company dividend levels B. based on future interest rates C. illegal D. based on current interest rates - Answer- B An investment is - Answer- forgone current consumption for expected future benefit. Derivative security examples - Answer- Call option, Put option Which of the following financial assets are included in household wealth? A. Bonds, automobiles and insurance B. Corporate stock, insurance, and collectibles C. Bank accounts, bonds and automobiles D. Bank accounts, corporate stock, and bonds - Answer- D The fundamental difference between real and financial assets is that real assets A. have productive capacity. B. are intangible. C. can be bought and sold. D. are tangible. - Answer- A True or false: An investment is the current commitment of money or other resources in the expectation of reaping future benefits. - Answer- True Which of the following statements is NOT true about equity. A. Shareholders with equity receive any dividends the firm may pay and have prorated ownership in the real assets of the firm. B. Sh